Ann: New Exploration Tenement Granted , page-6

G'day Seaemay,

I have been watching/reading/enjoying your posts for some time, and thought I would respond, for once.

Its a character building exercise for certain; holding shares in VML.

But, like building character, a long term view of VML is required for it to prove worthy of your investment and support.

You can be sure that with JOGMEC heavily influencing the direction of VML's development as a company, you have a long term view behind all the critical decisions on the future of the Watershed project.

Readers who are not aware of JOGMEC need to do some research, because not much about VML and Watershed makes sense without understanding JOGMEC's role in the Watershed project.

You and I, and perhaps the Directors of VML, might be worried by fluctuations in the price of Tungsten, the exchange rate, VML's share price on the ASX, and the company's cash reserves and rate of expenditure. But not so much JOGMEC.

Probably, there would be no DFS currently nearing completion had not JOGMEC first ran its ruler over the Watershed project quite a few years ago now, found it attractive and worthy of their attention. Long run attractive.

Years ago, JOGMEC would have identified the threat to Japan's supply of Tungsten, from China mostly, and taken the decision to secure alternative sources of supply to ensure Japan is never held to ransom over Tungsten. That is JOGMEC's charter from the Government of Japan - to secure Japans supply of the raw materials its industry and economy depends on. Watershed is JOGMEC's answer to Japan's Tungsten question.

Stop. Think about that for a moment. Ask what this means, exactly?

To understand how this came about it is instructive to research the reasons behind Japan entering the Second World War as it did.

From what VML says in its ASX reports, JOGMEC continues to be a supporter of the Watershed project. It may have a different view on how exactly Watershed might be developed and operated, but JOGMEC remains committed to bringing the mine to production with VML as operator.

VML should encourage, and it appears to actually foster the ongoing involvement of JOGMEC in the project. They cannot do otherwise. Without JOGMEC, VML does not have a project.

As VML shareholders, we simply need to recognise the influence JOGMEC has over the day to day decision making of the VML Board, and come to accept that a long term view, much longer than what we are used to with other Australian companies, is dominant in this project.

So long as JOGMEC remains I am certain the project will come to market eventually.

There will be lots of ups and downs for VML shareholders between now and when the mine is producing at a profit, but when we get to that point today's VML shareholders will be rewarded with a greater demand and significantly higher prices for their shares.

So, I am tending to look past today's Tungsten price, the current exchange rate, and movements in the VML share price, because I believe the major shareholder in the Watershed price is taking a 40 - 50 year view of how the project should be developed, and how its product is to be brought to market.

A six months delay, or even a year's deferral of the release of the DFS will mean nothing to JOGMEC. Particularly if that delay is caused by JOGMEC asking for new options or considerations to be assessed by the DFS. What is a year compared to 40 years.

Remember, JOGMEC probably needs the results of the DFS more than VML does. The DFS will be relied on by the Japanese banks and the Japanese company that buys JOGMEC's 30% stake in the Watershed project when they make their decisions to invest or finance their participation in the project.

For this reason, the VML Board is bound to agree to these requests from JOGMEC, even while knowing that such agreement produces further delay in delivery of the DFS. Knowing also that such delays can only have negative impact on VML's shareprice.

That is something that we Australians have little understanding of.

Its nearly 70 years since the end of WWII. This means that none of the fund managers and big decision makers in Australia's finance industry today, the people who make daily buy/sell decisions on the ASX, and who influence VML's share price on a day to day basis, have any concept of how JOGMEC is playing this project. If pushed, I might agree to "most of the fund managers" instead of "none", above.

Driven by their key performance indicators for successful companies, these decision makers will reject VML when they run their rulers over it. Many will not even know that JOGMEC is involved, or what JOGMEC means to Watershed coming to production.

And that means, in my lonely opinion, that the market has VML all wrong. That call led to me buying into VML lows recently.

So, I am very happy to be holding VML shares, for the long run, even though I am certain there will be ups and downs in the share price in the interim.

Take the buying opportunities the market gives you, then wait. Don't try to understand or anticipate the market too much. The people who make up the market must get it wrong from time to time, and with VML, I believe they are missing its potential, right now. Totally.

As I said at the outset, this is very character building.